The California Legislature has created a Joint Conference Committee to coordinate, consider and recommend a comprehensive proposal to resolve many of the electric utility wildfire-related inverse condemnation liability and cost-recovery issues pending at the California Legislature. The Joint Conference Committee has taken testimony on these issues from a variety of interested parties, with a primary focus on:
(1) Whether it is constitutionally permissible for the Legislature to adopt Governor Brown’s proposal to change the standard of review for electric utility liability for wildfire damages under California’s inverse condemnation rules from the current strict liability standard to a reasonableness standard, based on factors developed by the courts for reviewing flood control district liability under inverse condemnation;
(2) Whether it is fair and reasonable, for legal, policy and insurance-related reasons, to change the standard of review for electric utility liability for wildfire damages under inverse condemnation from a strict liability standard to a reasonableness standard;
(3) Whether PG&E should be allowed to issue bonds to securitize its potential liability for 2017 wildfire-related damages, to be paid, over time, by its customers through a dedicated charge on their bills; and
(4) Whether the Legislature should direct the California Public Utilities Commission (CPUC) to (i) consider and approve utility wildfire mitigation plans in new, separate proceedings, within specified timeframes; and (ii) change its standard of review for utility wildfire cost recovery requests, including recovery for wildfire-related damages, from the CPUC’s current “prudent manager” standard to a determination of whether a utility’s actions were in “substantial compliance” with its approved wildfire mitigation plan.
The intent of the Joint Conference Committee is to issue a final report addressing these and other utility wildfire-related liability and cost recovery issues by the end of the current Legislative session for review and approval by the Legislature and the Governor.
Contact: Ron Liebert